Subsidies stay in farm bill

Senate plows past several attempts to trim payouts

December 15, 2007|By Stephen J. Hedges, Washington Bureau

WASHINGTON — After a month of contentious partisan wrangling, the Senate approved its version of the subsidy-rich farm bill Friday, turning back attempts by both Democrats and Republicans to cut billions of dollars in federal payouts to farmers.

The farm bill, worth about $286 billion, does far more than support the nation's farms, commodity markets and agribusinesses. It also sets food stamp policy, school snack program spending and even would provide some aid for foreign hunger relief. The Senate approved the measure on a 79-14 vote. The House passed its version last summer, also for $286 billion, and now Senate and House conferees hope to mesh their differing versions next month.

Principally, though, the farm bill directs how much the federal government will subsidize farmers, payments that farmers have come to rely on, and that members of Congress have reliably protected, as they are hoping to do in the current bill.

About $26 billion of the last farm bill, passed in 2002, went to "direct" payments, in which farmers are essentially paid federal subsidies for simply owning land and growing crops. The new bill would allow for subsidies at about the same level.

President Bush has threatened to veto the measure because of the continued high level of the subsidies, but if agreement is finally reached, the bill would set farm policy through 2012. It also includes an annual disaster relief fund of $5 billion. Some senators criticized these funds as yet another subsidy, one that would chiefly benefit western Great Plains states where dry weather has plagued wheat crops.

The bill also increases funding for rural conservation and biomass fuel development and gives a boost to so-called specialty crops -- fruits, vegetables and nuts -- by increasing nutrition spending by more than $5 billion. It includes $4 billion for a rural conservation program.

'Great bill' or 'flawed'?

But it was the direct subsidy payments, which are viewed by farm policy reformers as the most egregious expenditures, that drew intense fire during the Senate floor debate. The subsidies reward farmers essentially for owning farmland. Several amendments proposed eliminating or cutting them, but each failed earlier this week as Democratic leaders pressed the bill toward passage.

"Unless the House and Senate can come together and craft a measure that contains real reform, we are no closer to a good farm bill than we were before today's passage," he said.

The Bush administration wanted to drop the adjusted gross income cap for those eligible for subsidies to $200,000. That was too low for the Senate, which passed a cap Friday of $750,000. That won't take effect until 2010. The current adjusted gross income cap for subsidies is $2.5 million.

"It really is a shameful abdication of leadership on the part of the Senate," said Ken Cook, president of the Environmental Working Group in Washington, which favors reduced subsidies. "And it's made all the more shameful by labeling it as reform. It's really outrageous."

Cook and others complain that the subsidies, under the current payment scheme, reward the most successful farmers with the most land.

Under the current subsidy program, the top 1 percent of farm subsidy beneficiaries received 17 percent of the federal subsidies between 2003 and 2005, or an average of $377,484 apiece, according to Department of Agriculture figures obtained by the Environmental Working Group.

In Illinois, 66 percent of the 73,027 farms received some sort of government subsidy since 2002, according to the figures.

Overall, U.S. taxpayers have spent $131 billion on federal farm programs over the last nine years. The Government Accountability Office recently found that USDA had paid $1.1 billion to the estates and companies of deceased farmers from 1999 to 2005.

The Senate bill does put new limits on subsidy payments to landowners who are not directly involved in farming.

Ironically, Harkin was one of many senators who earlier said he hoped the bill would pare down what have become often generous subsidies to some farmers and farmland owners.

But Harkin and others took the legislative gamble of waiting until the bill reached the Senate floor to press for those cuts, knowing that reduction of subsidies would face opposition in the agriculture committee, which is stacked with farm-state senators who rely on the subsidies as political rewards for their constituents.